‘It’s OK to Convert Open Source Project into Business as Long as the Code Remains Open’

GNUKhata founder Krishnakant Mane is all set to commercialize the open source project by launching an integrated enterprise version of the software.

Open source advocate and India’s first visually impaired IT professional, Krishnakant (KK) Mane, is on a mission with a vision to replace costly proprietary programs with open source alternatives.

Through his NGO, Digital Freedom Foundation, he is also trying to bring freedom of technology in education using free software.

GNUKhata, an open source invoicing, inventory management and accounting automation software, is one of the projects being developed at Digital Freedom Foundation.

He initiated the project in 2009 with the help of a modest team of programmers. The aim was to ease the business of technically underserved sections, especially small businesses, starups and traders, who couldn’t afford expensive enterprise programs.

Krishnakant now wants to commercialize the product by launching an integrated enterprise version of the software.

In an exclusive chat with Longjam Dineshwori of EFY Networks, Krishnakantshares the idea behind launching an enterprise version of GNUKhata and refutes the myth that ‘open source software can’t do business.’ He also talks about various business models one can choose to get profit from open source projects, the benefits of using General Public License (GPL) and much more.

Excerpts:

Q1. Can you take us through the early journey of GNUKhata project?

Back in 2007, I used to be a FOSS consultant and also a project fellow at Homi Bhabha Center for Science Education of TIFR.

In the process of shifting several companies/ organizations from proprietary to open source IT infrastructure, I distinctively kept noticing that the computers involved in accounting related activities would never switch over to using open source. This was because there was no professional quality formidable open source accounting software coming anywhere close to most popular proprietary accounting software.

So, the need was very obvious. It was just the question of who will do it and when. I felt that the answers were with me and it has to be done with due urgency.

Thus, I started the project with four interns from SNDT, who were highly talented girls and shared the feeling of importance of what they were doing.

I had learned a bit about accounting principles and transaction rules from a couple of domain experts. Mr. Raul from Homi Bhabha Centre was one of the initial accountants to help out on that aspect.

It was a desktop-based application which we were developing and one of our interns had herself worked in a similar capacity with Tally enterprise. Needless to say, she had some hold of how an accounting software works.

We got the first version out with basic accounting features including elementary reports such as trial balance, Ledger, etc.

Meanwhile, an NGO by the name of Comet Media Foundation took up the responsibility of hosting the modest team which I had assembled. This NGO also provided a little funding to keep the team going.

When we felt that funding was increasingly falling short, a turning point came in the form of National Internet Exchange of India (NIXI) accepting my appeal for funding this extremely important FOSS initiative.

Considering my own career and recognition as one of the very few visually impaired IT professionals across the world in those days, a presentation in a conference helped me to get this funding.

Q2.Who are the people you would give credit for the success of the project?

Many people have helped this project directly and indirectly to grow.

Valsa Villiams, who was the then director of Intel and Dr. Jaijit Bhattacharya, Director of Erstwhile Sun Micro Systems, were the biggest supporters and have always guided me, especially when it comes to getting grants/ funds to keep the project going. And it was Dr. Nagarjun from Homi Bhabha Centre, who has always acted to get the team out of problems in several situations.

After Comet Media Foundation, I had to shift the project’s development to IIT Bombay where the central government provided funding on the recommendation of Prof. Kannan,a professor in the chemical department, IIT Bombay.

While NIXI funding lasted till mid-2009, the project had hit a lull and the central government funding in IIT came only in April 2010.

However, there was a fundamental difference in the vision shared by me and the funding committee of central government. National Mission for Education through ICT (NMEICT) who funded GNUKhata during its IIT days had a vision to just bring it to the level of an educational tool, while I wanted to make this software an enterprise quality, commercially competent open source solution.

So, eventually the project had to part ways from IIT and I started Digital Freedom Foundation <www.dff.org.in> an NGO for development and propagation of FOSS, specially in the field of commerce.

GNUKhata soon became its flagship product with massive funding from International Centre for FOSS (a Kerala government initiative) for 5 years between 2012-2017.

The software is in its version 6 now and has a lot of enterprise quality features, generally available only in high-end proprietary programs. It can also be hosted on cloud and can also be used on a stand-alone machine.

It is currently taught in elementary accounting course in the State of Kerala. Maharashtra State board has also included GNUKhata in its syllabus for 11th standard and plans doing the same for 12th standard as well.

We have more than 6500 active users with close to no marketing.

Currently Accion Labs PVT. LTD. has adopted the software and is contributing to the project in financial terms. However, the said company does not view it as a commercial opportunity, given the difference in their area of work which is not FINTEC.

Q3. Given that GNUKhata’s mission is to replace costly proprietary products with an open source alternative, why do you intend to bring an enterprise version of the same with a business model? Will it be proprietary? Will it turn the project into business?”

Yes, there was always this intention to make it enterprise quality and for that a self-sustained revenue model is what it takes. But GNUKhata itself will always remain open source. Not a single bit of it will ever become proprietary. It is a common misunderstood belief that open source software can’t do business. There are also a few extremists who preach that free software (often called open source) developers should *never* think of business and do only social work.

These people have already got their tummy full and pockets filled till the brink.

Everyone has to earn their livelihood, and many have a great business vision for their product. So, it is absolutely fine to convert an open source product into business as long as the “free as in freedom ” values are not compromised and the software itself always remains open.

What I have in mind is to build enterprise quality services including those for GST, e-way bill, TDS, etc. The idea is to use GNUKhata for billing and automated accounting and then connect it to our enterprise services, latter being paid offerings.

This would give real consumers a one-click application where they can just go about doing their billing/ invoicing, while filing of GST, TDS and generating reports would happen totally automatically.

We mainly wish to serve the technologically underserved, like the micro and small businesses as well as some sectors of medium scale companies. These customers don’t have the money to buy expensive enterprise quality ERP, and even if they do, the baggage of unnecessary extra features makes for a steep learning curve.

We expect our customers to have very little or no accounting knowledge.

Q4. What makes you take this decision?

Any serious software development can only sustain with dedicated team, proper infrastructure, marketing and other human resources including dedicated quality control, etc.

GNUKhata is one of those serious mission critical programs which has to do with people’s money.

Such projects can’t go a long way with part time developers, voluntary community contributions, etc.

Whatever this project has achieved so far is due to dedicated government funding from Kerala and some other bodies like the National Internet Exchange of India and HRD Ministry of the central government.

As you know such grants don’t last for ever and it is really a lot of work to get these funds. So, to sustain any project of the level of GNUKhata, there ought to be a business model which not just facilitates wider adoption but generate profits and provides extremely good experience with total transparency.

Q5. What are the features that you are going to offer under the premium service?

GST returns without user doing any accounting entries, same with TDS, E-way bill, fully automatic bank reconciliation and much more.

Note that many of these services are available from third party services for a fee. So, we will be integrating these APIs into our enterprise version.

Many features are already available in GNUKhata for free albeit with restrictions.

With the enterprise version of GNUKhata, we will be able to provide an end-to-end automated solution, which is very unique to India and at a very very low-price range.

Q6. Since your software is under GPL, what are the advantages and disadvantages from the business prospective?”

Many products such as MySql database are under GPL and are still provided through a business model. GPL warrants the level of transparency and openness which can never be exploited by anyone who wishes to make the program proprietary. Any feature added to it has to be in GPL.

The business model I chose to follow is to keep GNUKhata free as in freedom and connected to an enterprise cloud offering which can put GNUKhata to best use.

Q7. The commercial offering will be on a ‘Freemium model’ – Please elaborate on this?

As mentioned before, it’s my passion to serve the technologically underserved sector. Extremely micro businesses, small NGOs and individual practitioners neither have enough money to pay for enterprise software nor require any complex feature set. For such people we would be providing a free hosted service without those high-end services.

As GNUkhata is free to download and use it offline. Our premium customers, however, will be able to avail our enterprise services which they need and can also afford to pay for.

Q8. What business model developers usually follow to make money from open source software?

There are several models, one of which I have already discussed above. Other model is to dual license the product wherein a paid license version is provided alongside a free community edition; Redhat and MySql are best example of this model.

Customization and support are another way of earning money from opensource.

Q9. In your opinion how a developer can maintain a balance between being open source and creating a viable business.

It’s only a myth that software once open cannot make business.

This has been further aggravated by several extremists who wish to impose that FOSS developers should never intend to do business and only work on a non-profit mode. As long as developers keep their code open and allow complete freedom there should be no need to worry about band consequences.

Q10. The GNUKhata team also intends to train rural and semi urban youth in bookkeeping. When you plan to start this and how it will be executed?

It will be started soon, perhaps in the winter of this year. The way to do it would be to train several like-minded FOSS enthusiasts, preferably with basic commerce background. We would then collaborate with several NGOs to scale up this rural IT training. We wish to generate employment through this initiative.

Q11. You have built your business around open source, what would you suggest to other developers who are doing the same, or would want to do?

Open source is now recognized much beyond a simple social initiative or a technocrat’s hobby. It is considered as the most preferred way of developing concepts and products. In fact, I would suggest all to be opensource developers and consider opensource as master key to business or their own career.

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